A Guide to Property Investment Portugal
From its balmy southern shores to the famous ski regions in the north, Portugal has long been an attractive nation for foreign property investors. With a strong and growing holiday industry and property prices that continue to climb, many find this European jewel is well worth their investment consideration.
Portugal’s long-standing association with the European Union and its incredible natural draws such as sun-drenched beaches make it an “old European” country worth looking at. We at Nubricks.com specifically reference the following 10 reasons as strong factors driving investor confidence in Portugal’s real estate market currently: -
1) Portugal’s Stable Government Inspires Property Investor Confidence for the Long Term
Portugal has operated as a democratic republic since the bloodless Carnation Revolution in the 1970s. The country’s sustained and well-developed democracy has four branches of power that serve to check each other, the overall political stability of Portugal makes this country stand out as a strong choice for investors who want an established and stable country to buy their property investment assets in to avoid any related instability issues affecting long term potential gains and yields.
2) Portugal’s European Union Status Gives the Nation Prestige for Property Investors
Portugal has been a member of the European Union since 1986 and has since become a Euro zone country and it remains very active within the politics and dynamics of the Union. With its currency backed by the EU and entry requirements very basic for EU residents, investors get into the Portuguese property market knowing the country has the backing and support of the whole of Europe. This is a strong factor driving investor confidence in Portugal, even in times of a slight economic downturn.
3) Property Investors take Heart that Portugal Enjoys Economic Stability
Portugal has been experiencing an economic slowdown as of late, but government-led reforms and strong EU backing are making this country’s outlook appear brighter for the medium term. The Economist reports that economic growth averaged less than 1 % per annum between 2002-06, however many believe domestic demand and increasing employment will restore economic confidence in the medium term.
The tourism industry in Portugal remains a strong and growing factor positively affecting the country’s overall economic standing. The relative ease with which Portugal is weathering a bit of a downturn speaks to this country’s ability to maintain economic stability which helps give investors confidence in the long-term prospects of property assets bought and held in Portugal.
4) Strong, Sustainable Tourist Market Makes Portugal very Attractive to Investors Looking for Holiday Rental Returns
The ever-popular Portuguese landscape attracts a great deal of visitors each year. The travel and tourism industry is anticipated to generate about EUR 39.1 billion in 2007 alone and demand and arrivals are anticipated to enjoy a steady increase of 3% per annum between 2008 and 2017, according to the World Travel and Tourism Council. With beaches, mountains, historic sites and quaint seaside villages to explore not to mention golf courses aplenty, Portugal appeals to many holidaymakers. This is especially good news for those looking to invest in holiday homes and property to let.
5) Portugal’s Landscape Attracts Holidaymakers, Expatriates, Retirees and Professionals Giving Great Opportunity to Property Investors
The natural attractions of Portugal enable the country to sustain a steady influx of holidaymakers, expats, retirees, professional workers and investors. With dynamic cities, dramatic mountains, plenty of Atlantic Ocean coastline, rolling plains and many golf courses, Portugal offers a little bit of something for everyone.
The northern region is characterized by a changing climate that includes ideal ski weather within the mountainous regions and the south is known for nearly year-round warm to mild temperatures and for being the golfing capital of Europe. Portugal itself is known as one of Europe’s warmest destinations and the opportunities for sunning, surfing and even high-adventure snow skiing make Portugal a favourite among holidaymakers. This of course is good news for investors who can choose their target market or investment approach and select regions, cities or real estate to suit.
6) Large Expat Community and Friendly Populace Make Portugal Welcoming, Drawing Greater Demand for Portuguese Property
Portugal has long been a favourite for retirees, expatriates and holidaymakers alike – especially those who herald from the UK. This alone makes the country very attractive for several investment strategies. With an already large expatriate community and a populace that is noted for its welcoming, friendly approach to visitors and newcomers, investors here find the atmosphere is often to their liking. The country’s appeal for tourists and retirees makes buy-to-let strategies quite favourable, but strong demand is increasing prices making buying purely for capital growth and resale attractive as well.
Portugal’s cost of living is also considered quite low which of course appeals to many and boosts investor confidence as well – an affordable and attractive nation is more likely to remain popular with expats and retirees who will provide an investor with an exit strategy when they arrive and seek property to purchase.
7) Strong Demand for Property Makes Investment in Portugal Attractive
Demand in many of Portugal’s most affluent towns and cities and most attractive tourist areas remains high giving rise to a strong level of confidence among property investors. Although some of Europe is feeling a real estate crunch, experts say the Portuguese property market should remain stable thanks to a solid banking system that has enabled it to avoid the sub-prime crisis.
Add to this news from Knight Frank about the Algarve and the outlook is quite promising - property prices in the Algarve alone have doubled in the last 10 years according to the property experts, and the level of growth experienced in the region is continuing. Other regions have experienced more modest growth but prices have still steadily been on the rise. This is an incredible confidence booster for buyers who prefer strong markets with long term potential.
8) Easy Buying Process Makes Property Investing in Portugal Pleasant for Buyers
The property buying process is relatively straightforward in Portugal. Investors here generally appoint representatives to help them overcome the language barrier, but beyond this most people find the buying process simplistic.
British and International banks have a strong presence in the Portuguese market as well, meaning international buyers find it easy to get a mortgage and Barclay’s Bank for example, with its circa 130 branches in Portugal have English-speaking representatives who make themselves available to their customers to expedite the process of buying real estate in Portugal. This of course gives investors and buyers a sense of confidence in buying and working their way through the purchasing process.
9) Excellent Accessibility Makes Portugal Ideal for Property Buyers, Expatriates and Holidaymakers alike
Portugal is readily accessible from the UK; thanks to easyJet, Ryanair, Jet2.com and Flyglobespan all offering cheap flights on a regular basis, getting to Portugal is cheap and easy for investors and holidaymakers.
Add to this the billions of Euros the government is currently ploughing into infrastructure improvements within the country, and the ability to travel to and within Portugal is constantly improving. Government projects include national and international train links, airport expansions and more. This is excellent news for anyone wishing to purchase property in Portugal and it is also a big plus for holidaymakers and expatriates who want to get around once they arrive.
10) Euro-Based Financial System Bolsters Portuguese Property Buyer Confidence
As a long-standing member of the EU, Portugal has chosen to adopt the Euro as its currency, making it part of the ever-growing Euro zone. This lends itself to making buying here a great deal easier for many Europeans. Whilst Brits will have to deal with exchange rates, the exchange rate of the pound to the Euro is quite favourable at 1.4 Euros to a single pound at the moment. This is a fantastic confidence booster for British buyers as their money tends to go far in Portugal. It is also excellent for Euro zone Europeans who do not have to deal with currency exchange here to invest in property.
Portugal’s property market is driven by a number of factors that inspire investor confidence; with growing demand and a sustainable tourism industry, the multiple attractions of the nation make it a location choice worth considering for buyers with designs to invest in foreign property.
